You have asked anime FAQ #1
The short answer, blame it on Disney, specifically on Bambi
Osamu Tezuka, the founder of the modern manga (Japanese comics) was greatly influenced by Disney's films, and liked the look in Bambi. Since he was the god/founder of the genre, others copied his style(Ironically, Disney would later rip off one of his stories, Jungle Taitei, and give no recognition. You might know it better as The Lion King)
The small mouths are mostly because they are easy to animate. anime was originally produced by comic artists on very low budgets, and this saved a lot of time.
Not all anime girls look the same BTW, it really all depends on the genre
Jeff Kleist

And what is up with their mouths suddenly going from tiny little slits, to huge gaping holes as big as their head when they yell? And they always look really pissed off, with veins popping out of thier foreheads?
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Warner Bros. is officially dead to me.

because they are yelling, and its being exaggerated? That seems logical compared to some of the expressions.
What about when they are dumbfounded or rendered speechless, and their eyes shrink to dots? That one confuses me.

All females look the same, all old people look the same, all children look the same, all teenagers look the same, but adult men (30s and above) usually look different. In Neon Genesis Evangelion, every adult male character looks different, but all of the other characters have similar features (the nose and eyes are usually shared features).

Go to www.animenation.com, find a link called Ask John. Basically speaking, Ask John is a weekly question and answer session about all things anime. It's also a good faq for anime newbies.
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"I don't know, Marge. Trying is the first step towards failure." - Homer J. Simpson[Edited last by Dome Vongvises on August 21, 2001 at 06:29 PM]